“High Stakes Gambling”: Biggest Romney And GOP Donor Sheldon Adelson Did Business With Chinese Mob
Things are getting awkward for Sheldon Adelson, the casino magnate who pledged to spend a “limitless” amount of money to get Mitt Romney elected. Adelson’s latest woes stem from business practices surrounding his lucrative casino in Macau, the only Chinese city with legalized gambling.
The Macau operation has long been under scrutiny but a new in-depth investigation from ProPublica and PBS focused on allegations of improper, and perhaps in some cases illegal, business dealings by Adelson’s Las Vegas Sands company in China. While focusing on the possibility that Sands violated the Foreign Corrupt Practices Act with a $700,000 payment to a Chinese associate, PBS also released documents that bolstered accusations of business ties between Adelson’s shop and Chinese organized crime figures.
PBS reports that Sands was clear that, in order to drive business from mainland China to their Macau casino, they would need to use “junkets” — trips arranged by private companies to ferry high-stakes gamblers to Macau:
Among the junket companies under scrutiny is a concern that records show was financed by Cheung Chi Tai, a Hong Kong businessman.
Cheung was named in a 1992 U.S. Senate report as a leader of a Chinese organized crime gang, or triad. A casino in Macau owned by Las Vegas Sands granted tens of millions of dollars in credit to a junket backed by Cheung, documents show.
Cheung did not respond to requests for comment.
Another document says that a Las Vegas Sands subsidiary did business with Charles Heung, a well-known Hong Kong film producer who was identified as an office holder in the Sun Yee On triad in the same 1992 Senate report. Heung, who has repeatedly denied any involvement in organized crime, did not return phone calls.
Because Nevada gambling authorities forbid doing any business with organized crime, Sands’s Las Vegas gambling licenses could hang in the balance. (Adelson and his company refused to comment for the PBS story.) But Adelson has other issues with his China operations.
In 2001, Adelson allegedly helped derail House Republican measure opposing Beijing’s Olympic bid due to human rights issues. “The bill will never see the light day, Mr. Mayor. Don’t worry about it,” he reportedly told Beijing’s mayor after phoning then-House Majority Whip Tom Delay. Sands went on to receive its lucrative casino license from China.
Part of Adelson’s Chinese dealings, which came under federal scrutiny in 2011, went through a non-profit called the Adelson Center for U.S.-China Enterprise. According to a WikiLeaks cable flagged by Salon, the association, which was meant to facilitate business between the U.S. and China, was shut down by China after some “missteps” with “funds transfer mechanisms” used by Sands. Unlike competitors, the cable said, Sands lobbied Beijing directly instead of going through Macau authorities. Adelson and Sands deny any wrongdoing related to the federal investigation.
Adelson’s many interests in politics are sometimes business-oriented and, on other issues, purely driven by ideology. Either way, his spending is massive. Adelson pledged to join forces with the Koch brothers to take down President Obama. Sen. John McCain (R-AZ) — a top surrogate for Romney’s campaign — said of Adelson’s Chinese business interests and political giving that “maybe in a round-about way, foreign money is coming into an American campaign, political campaigns.”
By: Ali Gharib, Think Progress, July 16, 2012
“Policy And The Personal”: Standing Up To The Tut-Tutters
A lot of people inside the Beltway are tut-tutting about the recent campaign focus on Mitt Romney’s personal history — his record of profiting even as workers suffered, his mysterious was-he-or-wasn’t-he role at Bain Capital after 1999, his equally mysterious refusal to release any tax returns from before 2010. Some of the tut-tutters are upset at any suggestion that this election is about the rich versus the rest. Others decry the personalization: why can’t we just discuss policy?
And neither group is living in the real world.
First of all, this election really is — in substantive, policy terms — about the rich versus the rest.
The story so far: Former President George W. Bush pushed through big tax cuts heavily tilted toward the highest incomes. As a result, taxes on the very rich are currently the lowest they’ve been in 80 years. President Obama proposes letting those high-end Bush tax cuts expire; Mr. Romney, on the other hand, proposes big further tax cuts for the wealthy.
The impact at the top would be large. According to estimates by the nonpartisan Tax Policy Center, the Romney plan would reduce the annual taxes paid by the average member of the top 1 percent by $237,000 compared with the Obama plan; for the top 0.1 percent that number rises to $1.2 million. No wonder Mr. Romney’s fund-raisers in the Hamptons attracted so many eager donors that there were luxury-car traffic jams.
What about everyone else? Again according to the policy center, Mr. Romney’s tax cuts would increase the annual deficit by almost $500 billion. He claims that he would make this up by closing loopholes, in a way that wouldn’t shift the tax burden toward the middle class — but he has refused to give any specifics, and there’s no reason to believe him. Realistically, those big tax cuts for the rich would be offset, sooner or later, with higher taxes and/or lower benefits for the middle class and the poor.
So as I said, this election is, in substantive terms, about the rich versus the rest, and it would be doing voters a disservice to pretend otherwise.
In that case, however, why not run a campaign based on that substance, and leave Mr. Romney’s personal history alone? The short answer is, get real.
Look, voters aren’t policy wonks who pore over Tax Policy Center analyses. And when a politician — say, Mr. Obama — cites actual numbers in a speech, well, there’s always a politician on the other side to contradict him. How are voters supposed to know who’s telling the truth? In fact, earlier this year focus groups given an accurate description of Mr. Romney’s policy proposals refused to believe that any politician would take such a position.
Perhaps in a better world we could count on the news media to sort through the conflicting claims. In this world, however, most voters get their news from short snippets on TV, which almost never contain substantive policy analysis. The print media do offer analysis pieces — but these pieces, out of a desire to seem “balanced,” all too often simply repeat the he-said-she-said of political speeches. Trust me: you will see very few news analyses saying that Mr. Romney proposes huge tax cuts for the rich, with no plausible offset other than big benefit cuts for everyone else — even though this is the simple truth. Instead, you will see pieces reporting that “Democrats say” that this is what Mr. Romney proposes, matched with dueling quotes from Republican sources.
So how can the Obama campaign cut through this political and media fog? By talking about Mr. Romney’s personal history, and the way that history resonates with the realities of his pro-rich, anti-middle-class policy proposals.
Thus the entirely true charge that Mr. Romney wants to slash historically low tax rates on the rich even further dovetails perfectly with his own record of extraordinary tax avoidance — so extraordinary that he’s evidently afraid to let voters see his tax returns from before 2010. The equally true charge that he’s pushing policies that would benefit the rich at the expense of ordinary working Americans meshes with Bain’s record of earning big profits even when workers suffered — a record so stark that Mr. Romney is attempting to distance himself from part of it by insisting that he had nothing to do with Bain’s operations after 1999, even though the company continued to list him as C.E.O. and sole owner until 2002. And so on.
The point is that talking about Mr. Romney’s personal history isn’t a diversion from substantive policy discussion. On the contrary, in a political and media environment strongly biased against substance, talking about Bain and offshore accounts is the only way to bring the real policy issues into focus. And we should applaud, not condemn, the Obama campaign for standing up to the tut-tutters.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 15, 2012
“Mitt Romney’s Tax Problem”: Oh What A Tangled Web He Weaves
Mitt Romney wanted to have his cake and eat it, too. He wanted to make himself fabulously rich, be the captain of the financial universe, and become senator, governor and, now, president.
He wanted to do it all, without making public his financial dealings, his tax returns, his web of foreign tax shelters. That was his business, not the public’s. He should have chosen one path or the other—in his case, they don’t mix.
Mitt Romney was too cute by half. He was guaranteed payouts at Bain no matter how many bankruptcies, lost jobs, destroyed pensions. He thought parking money in off-shore Bermuda corporations, Swiss and Cayman accounts, and using fancy accounting gimmicks to create tax avoidance schemes could be either kept secret or explained away.
Now Republicans are calling for him to come clean, to release his tax returns, to untangle the web of financial dealings. But he can’t because he was up to his eyeballs in Bain when he said he wasn’t, as he continues to reap huge amounts of money from his years there.
So why all this back and forth on whether he “retired” from Bain in 1999? Simple. Ted Kennedy caught him in the Senate race in 1994 by exposing Bain and what it did to workers and companies.
When Romney saw a big opening with the takeover of the Olympics in February of 1999, he grabbed it and by 2001 he knew he had a shot at being governor of Massachusetts and maybe a great deal more.
But he also knew that Bain was a liability in another race in Massachusetts and decided that his “leave of absence” better become a “retirement.” After all, he was disengaged from the day-to-day operation of the company, even though reaping a six figure salary as an officer and many millions more because of his association as “president, CEO and sole stockholder.”
The last thing Mitt Romney wanted to do as he was planning his political future was have that Bain albatross around his neck again—no, the Olympics was his ticket.
But, now he has this very big problem—he can’t release his income taxes back 12 years as his father, George Romney, did when he ran for president. He can’t provide 23 years of tax returns as he did to the McCain campaign when he was angling for vice president and being vetted.
Tax returns will show his continued financial windfall from Bain and it will show all his off-shore shenanigans. And it will show that this is someone who was not paying his fair share of taxes according to almost anyone’s definition. That is my guess.
When Kevin Madden, his spokesman, read a statement that Romney did not put his money in foreign bank accounts and trusts to avoid taxes he was not asked the very simple question: Why did he do it, if not to avoid taxes? What was the reason for all these off-shore accounts? What was he trying to hide?
And now, Romney is in real trouble. If he is transparent about his financial dealings and taxes, he knows it would be devastating to his campaign. If he tries to stonewall, he has three and a half months of a long campaign, not three and a half weeks. That is a long time to keep trying to change the subject.
So the question for Romney is: Can he have his cake and eat it, too? Can he simply deny further requests for information and hope he can keep it secret?
While he is telling the middle class to “eat cake,” maybe he has to be careful he won’t be eating crow.
By: Peter Fenn, U. S. News and World Report, July 16, 2012
“CEO vs Politician”: Romney’s Claim That Shrinking The Government Help’s Americans Isn’t Rational
It’s time for us to cut back on government and help the American people.” — Mitt Romney
Chief Executive Magazine annually surveys CEOs about the best and worst American states for doing business.
America’s CEOs consider: Texas, Florida, North Carolina, Tennessee and Indiana the Five Best for Business States (BfB); and Michigan, Massachusetts, Illinois, New York and California the Five Worst for Business States (WfB). The survey’s rankings have been stable over long periods. Massachusetts, for example, has been known as a high tax, heavily-regulated state for at least the last forty years.
According to the survey, America’s BfB have what America’s CEOs want — smaller government, low taxes and business-friendly regulations. The BfB clearly have lower taxes and smaller government with an average per capita state tax of $1,843, compared to the WfB at $2,520. So, let’s examine whether smaller government is better for Americans.
CEOs, paradoxically, prefer to live and work in the high tax, heavily-regulated WfB. Of the Fortune 500 companies, 165 are headquartered in the WfB, while only about 100 are headquartered in the BfB. Among America’s 50 fastest growing corporations, about twice as many have headquarters in the WfB, as in the BfB. Even CEO Romney selected Massachusetts (ranked 47th on the survey) for Bain Capital’s headquarters, and it’s where he’s lived (on and off) for the last 30ish years.
The State Human Development Index ranks American states on well-being and opportunity for their residents (rank 1 is best). On this Index, the WfB are better places to live (average rank 13) compared to the BfB (average rank 36). Metrics such as: household income, life expectancy, infant mortality, and educational opportunity demonstrate that the BfB — are worse for people.
WfB median household incomes are much higher ($57,000 in the WfB vs. $47,000 in the BfB). Further, people live longer and have lower infant mortality rates in the WfB, compared to the BfB. The WfB average rank (rank 1 is best) is 14 for life expectancy and 15 for infant mortality, while comparable BfB ranks are respectively 31 and 36. In highway fatalities, WfB are safer (average rank 8) compared to BfB (average rank 31).
In higher education, the WfB (as a percent of their college-age population) graduate 50 percent more students with advanced degrees than the BfB. Also, the WfB have 23 of our nation’s top universities, compared to the BfB’s four.
No wonder CEOs choose to live, and establish growth companies in, the so-called Worst for Business states.
Mitt Romney’s shibboleth that shrinking government helps the American people — isn’t based on any rational analysis of costs and benefits. Government isn’t a parasite destroying the American economy. Government is the provider of public goods (infrastructure, education, police, safety standards, etc.) that the private sector can’t or won’t provide. If citizens select lower taxes, smaller government and less regulation, they’ll get: less infrastructure, fewer police, teachers and inspectors, resulting in worse outcomes.
This isn’t a universal defense of every government employee or program. Nor am I claiming that bigger government is always better government. Government programs should be evaluated, and terminated (or restructured), if they aren’t efficiently serving taxpayer needs.
Throughout my career (in the Bloomberg administration, at the World Economic Forum and its Davos conferences, and at McKinsey), I’ve had the honor of working with some of the world’s leading CEOs, venture capitalists and entrepreneurs (such as, my co-judges for NYCBigApps).
I found these business leaders incredibly talented at what they did. However, business expertise conveyed no automatic insights on public policy.
My old boss, NYC Mayor Michael R. Bloomberg (who made a highly successful transition from private to public sector), emphasized that the public sector must make investments the private sector won’t risk making. Consider President Obama’s successful public sector rescue of the auto industry vs. the private sector approach, which would have left millions more unemployed.
Another smart public sector investment is Applied Sciences NYC (Mayor Bloomberg’s plan to bring a major new engineering campus to NYC). The mayor’s team did all the work to develop Applied Sciences NYC, but won’t reap any tangible benefits — the benefits are for future generations of New Yorkers. But that’s what the public sector must do, to benefit the governed: make major, long-term investments in education, infrastructure, health and other public services.
CEO Romney’s actions, in selecting Massachusetts as his base, suggest he understands the importance of government in making America a better place. But, Politician Romney’s statements suggest otherwise.
Which Romney are we supposed to evaluate for president?
Disclosure: As the Bloomberg administration’s head of policy and strategy for economic development, I was an architect of Applied Sciences NYC.
By: Steven Strauss, Business Insider, July 16, 2012
“Grave Digger”: Mitt Romney’s Deeper And Deeper Hole
If today is the Romney campaign’s idea of how to get out of the box Romney is in, they’re even less ready for prime time than I thought. This is, well, amazing:
“There may have been a thought at the time that it could be part time, but it was not part time,” [Romney spokesman Ed] Gillespie said. “He took a leave of absence and in fact he ended up not going back at all, and retired retroactively to 1999 as a result,” he added.
He ended up not going back at all? So I presume since he retroactively retired, he also paid back the salary he earned during that period. But apart from that, how does the Romney campaign explain the following claims made under oath by Romney and his lawyer testifying about his Massachusetts residence to qualify for the race for governor:
Romney testified that “there were a number of social trips and business trips that brought [him] back to Massachusetts, board meetings” while he was running the Olympics. He added that he remained on the boards of several companies, including the Lifelike Co., in which Bain Capital held a stake until 2001…
“He succeeded in that three-year period in restoring confidence in the Olympic Games, closing that disastrous deficit and staging one of the most successful Olympic Games ever to occur on US soil,” said Peter L. Ebb from Ropes & Gray, [his lawyer at the 2002 hearing].
“Now while all that was going on, very much in the public eye, what happened to his private and public ties to the Commonwealth of Massachusetts? And the answer is they continued unabated just as they had.”
So either Ed Gillespie and Romney are lying now, or Romney and his lawyer were lying then. Which is it? They were and are obviously trying to have it every which way to suit whatever purpose at the moment. But legally, CEOs are responsible for their companies, whether they are managing them full time, part time or even retroactively retiring while managing them. Period. The buck stops with the CEO, just as much as it stops with a president. As a Bain partner at the time said today:
“Mitt’s names were on the documents as the chief executive and sole owner of the company,” Ed Conard, who served as a partner at Bain Capital from 1993 to 2007, said in an exclusive interview with Up w/ Chris Hayes. Asked again if Romney was chief executive officer of Bain Capital from 1999 to 2002, Conard said, “Legally, on documents, I suppose, yes.”
Despite Romney’s statements that he left in 1999, Conard’s new remarks suggest that, in fact, Romney’s continued ownership of the firm enabled him to negotiate a better exit deal. “We had to negotiate with Mitt because he was an owner of the firm,” Conard said.
Romney, in other words, doesn’t have a leg to stand on. He has been running a campaign against the “Obama economy” insisting that the president own every single month he has been in office in order to condemn his economic management all the more – despite at least a first year in which Obama cannot really be held responsible for the fallout of an economic collapse he inherited. So Romney insists on maximal responsibility for Obama and the economy.
But responsibility for Bain? Think about it. No one disputes that Romney co-founded Bain, hired most of its staff, and honed its methods and strategies from 1984 to 2002. No one can dispute that he was paid at least $100,000 from 1999 to 2002 for being CEO. There is no massive difference between the kind of strategies Bain pursued from 1984 to 1999 when Romney was managing full-time and from 1999 to 2002, when he was managing part-time and by his own lawyer’s assertion that his Bain activities “continued unabated just as they had.” Is Romney saying that nothing that happened at Bain after 1999 is his responsibility but that everything that happened after January 2009 is all Barack Obama’s fault?
Yep, that’s what he’s saying. It’s a pathetic double standard argument from a suddenly pathetic and panicking campaign. The only way he can dig out of this hole – yes, Bill Kristol is right – is to release 12 years of tax returns just as his father did. Until he does, the Obama campaign has every right to double and triple their insistent criticism of Romney’s Bain record. And there will be more and more blood in the water.
By: Andrew Sullivan, The Daily Beast, July 15, 2012
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